Equity release

Browntoa

Depending on her age and health it can be construed as deprivation of assets

https://www.saga.co.uk/magazine/money/property/equity-release/a-guide-to-equity-release-and-care-fees

Broadyx

I would suggest she speaks to a financial advisor or a later life advisor with regards to her options.

There are equity release options that allow her to protect a certain amount of equity so that the amount she releases and the added interest roll up will always leave the % she has chosen to protect.

She could also look at a RIO like someone has mentioned, which commits her to the monthly interest payments, but means there is a risk of repossession, however does mean she only owes the amount borrowed at the end. With equity release there is no chance of repossession as set out by the Equity Release Council.

She could take ER with an option to make the interest payments - this is more flexible than a RIO as if she decides later on she doesn't want to make these payments, then the loan can switch to a roll up instead and no payments need to be made - this will obviously impact the amount owed at the end.

I guess the only other point to note is ER is not income assessed although I don't think this is a problem anyway as you have stated that her income is good. & property criteria is way stricter on ER than on a later life mortgage from experience.

Canada..... is one provider who offers ER but there are a fair few out there who offer similar products so the best thing she can do is speak to a financial advisor who is qualified in later life lending.

kingstreet

bowf wrote: »

My mother claims there's an option where she can borrow an amount, let's say £50K against the house value of £200K.
Then she can pay back the interest on that £50K only, with the £50K being taken from the estate when she dies.
So the £50K never changes, you just pay back interest only on it.
She says a friend of hers has done this, through a company with "Canada in their name".
Does this sound correct?

Hello!

Over here?!?

That's what I mentioned earlier, retirement interest-only!